The end of the third quarter is a time of significant transition in the vacation home market in the Poconos. The busy summer vacation season has wrapped up, and for some it is time to look at their position and perhaps make some changes. As a realtor focused on helping buyers find vacation homes they can also use as a STR, I keep an eye on the market and help identify trends that can help my clients. My STR-friendly community scorecards give a quick snapshot as to market trends. At the beginning of October, the tally of homes in those STR-friendly communities is 603, up very slightly from the end of the last quarter and the highest level it has been since the COVID shutdowns. It’s way too early to say the market is balanced between buyers and sellers, but there are signs that we are getting close.
Nice homes, priced right, are still selling very fast here in the Poconos. Great opportunities still draw competing offers, but it is more like 2 or 3 offers, not a dozen like it was a year ago. For vacation homes, cash buyers are still looking to invest in properties that have good potential knowing the outlook for tourism in the Poconos is bright. For most, the summer of 2022 produced another season of strong guest numbers and vacation rental income. Accounts of attraction attendance and visitor numbers show that Summer 2022 was great for tourism in the Poconos.
Interest in the area as a place to live full time, not just visit, is also on the rise which is keeping demand for housing very strong. The eastern end of the region has seen a steady inflow of people moving from New Jersey and New York. The number of properties that identify themselves as residential (versus seasonal) is rising throughout the communities that stretch along the Delaware River from Milford down to the Delaware Water Gap. Communities that are within 10-15 miles of the river continue evolving as extended suburbs of the metro NY/NJ area.
When a community (with a POA/HOA) pushes to change its identity, limits on STR soon follow. The number of “red lights” on the Pocono STR Scorecards continues to rise and two communities went from “green” to “yellow” in the summer of 2022. The long awaited STR ordinance from Tobyhanna Township was ratified and is now being implemented. It is estimated that 800 homes were operating as STR in the township and now that a license is required (with fees and restrictions), we’ll likely see some impact on home sales in Tobyhanna Township.
We are also in what is typically a seasonal surge in new property listings. The peak summer season has ended, and for some this is a good time to test the market to see what might happen. Realtors have been seeing lots of successful STR operators listing homes with the attitude of “what do I have to lose” by selling now after a successful season. Some successful operators are also continuing to rent which can make accessing these properties hard on weekends and inadvertently raises the days on market (DOM), which some buyers see as a key indicator on a property. If you are looking at a property that is currently active on Airbnb, you might just have to look at it in a slightly different way than a property that is actively for sale.
Very soon, the number of new listings will slow as we approach winter. What we have as STR-friendly inventory now is likely all that we will have until the next surge that begins in February. Like the end of the model year in the car business, now may be a great time to get a year-end deal. Also like they say in the car commercials: supply is limited, and the good ones are selling fast, so hurry on over to your local realtor and catch a great year end deal on a vacation home!